You only get one chance to make a first impression. When it comes to large or complex construction projects, your first impression is often your response to a request for a conceptual estimate.
While some may feel that early-stage estimates are too much work, they’re missing an opportunity. Those companies that are receptive to participating in feasibility studies have a distinct advantage over those that decide conceptual estimates aren’t worth the trouble.
Owners use feasibility studies to gain a clearer picture of what to expect in terms of budget and schedule for a proposed project. But your conceptual estimates hold the potential to be much more than just estimating exercises.
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Conceptual Estimates Can Contain More Than Numbers
Beyond just providing the anticipated costs of the project, your conceptual estimates are the first opportunity you have to impress an owner with your ability and expertise. If you deliver a basic estimate—that looks remarkably similar to your competitors—you won’t stand out on your merits. And you’re setting yourself up to be judged on price alone.
But if you treat the conceptual estimate as a way to showcase everything you bring to the table in terms of relevant experience and problem solving, you can compete by being the best company for the job, not just the cheapest.
Read on to uncover three ways that you can use feasibility budgets to solidify your competitive edge.
1. Use your project cost history to demonstrate credible expertise.
Many construction firms base their conceptual estimates on readily available generic cost averages. But using generalized data doesn’t do anything to set your firm apart or communicate your firm’s relevant expertise.
Instead, you can make a case for why you’re the right firm for the job by using the data from your past projects to put together your estimates. Highlighting similar work you’ve completed in the estimate you provide shows the owner that you’re not cutting your teeth on this project. Not only do you have plenty of experience, but you have specific experience completing the type of project they’re considering.
Plus, including more details can help owners and stakeholders to better visualize their project. You can play an integral role in helping them move beyond just the nugget of an idea in their minds to something that feels real and possible.
By going beyond the numbers and populating your conceptual estimate with relevant details from your own past experience, you show them the project is not only achievable but that your firm is fully capable of bringing it to life.
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2. Help the owner get buy-in with a more convincing feasibility budget.
At this early stage, your job is to help the owner determine if the project is feasible. But the owner is often accountable to other stakeholders whose support and buy-in is also necessary—not to mention potential funding sources who need to be equally bought in.
Your feasibility budget will help shape the proposals an owner presents to influential stakeholders. And your future profits depend as much on the owner impressing them as it does on you proving your worth to the owner.
When you use real-world, as-built cost data from similar projects to build your feasibility study, you don’t just give an owner information that’s persuasive to them, you provide what they need to present a compelling case to others.
For owners and lenders alike, the projected costs you provide are critical to the decision they’ll be making. And how you present those estimated costs can make a difference in how well they process the information and, as a result, how convinced they’ll be of the project’s success.
3. Position yourself as a partner in the budgetary estimating process.
When owners come to you with a feasibility bid request, they don’t yet know all of the specific details of the project. They may only have a general idea of what they want, with a few non-negotiable details. There are still a lot of factors that can change based on the information you provide them about cost and feasibility.
If it takes your team days to put together a conceptual estimate and days more to make changes to it based on new information, you’ll have a hard time helping the owner weigh their different options and come to the best conclusions for their project.
But if you have an efficient budgetary estimating process that allows your team to easily compare a current estimate to past project data and sub in new details as needed, you become a partner in helping the owner make decisions beyond the first feasibility budget you provide.
Maybe their initial vision of the project is out of their price range, but if you’re able to suggest a few small tweaks—like reducing the building footprint or selecting a different material for the exterior shell—you can get it back on budget. When you can easily explore different variations on the estimate, you help guide them toward the best choices with the budget and time they can afford.
Create Feasibility Budgets That Do More
A feasibility study that delivers the numbers is supplying the bare minimum. It may help you get the job, but it doesn’t give you much of an advantage over your competition. The cheapest bid isn’t the only factor in an owner’s decision. They also want a building they can be proud of. Your conceptual estimates are an opportunity to show an owner how you can help them make their vision a reality.
To start using your conceptual estimates to sell your firm’s expertise—and win more business in the process—you need an estimating process that showcases your relevant experience and past success. When you use the right tools, data, and approach, your conceptual estimates can give you a distinct competitive edge and position you as the best partner for the project.